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Ways to Pay for In-Home Care

It is important to explore the ways to pay for in-home care so you can help yourself or your loved one be more prepared. 

About 10,000 adults will turn 65 every day until the year 2030 in the U.S. and 7 out of 10 of these people will need long term care. Many of the elderly prefer to hire in-home caregivers so they can stay in their home for as long as possible. This allows them to be in familiar surroundings and gives them a little bit more independence while still getting the care that they need. The median cost of home health aide service in New Jersey is $34 (this varies based on location and type of services). 24/7 care can cost around $5,712 per week, or $24,820 per month. This is a considerable cost for people who have little or no income coming in during their golden years. It is important to explore the ways to pay for in-home care so you can help yourself or your loved one be more prepared. 

Personal Savings

Over 60% of home care services are paid from personal funds. This can be from:

  • retirement income

  • personal savings

  • 401k plan

  • pensions

  • proceeds from selling a home

  • proceeds from selling stocks or bonds

Pooled funds from family members

If personal funds are limited, the children or family members may decide to pool together their resources to help pay for home care. It is important for these family members to sit down and have a conversation about how much each one will be contributing, who will be collecting the funds, and how often to send the money. This will help set everyone’s expectations and avoid miscommunications.

Long-term care insurance

Some people have purchased long-term care insurance policies in advance that can help pay for home care. The current landscape for long-term care insurance has changed considerably in the last few decades. Many of these policies have gotten too expensive and the offerings have changed. If you or your loved one has this, make sure you fully understand what it covers and for how long. 

Medicaid

Medicaid may cover in-home care services for low-income seniors. This may be offered through three different forms: 

  • Your state’s regular Medicaid program (classic/original Medicaid) - Every state offers this in one form or another; individuals need to meet eligibility requirements; no waiting lists.

  • Home and Community Based Services (HCBS) Medicaid Waivers (Section 1915(c) Waivers) - Each state has different eligibility requirements; qualifying doesn’t mean automatic receipt of benefits; there’s usually a waiting list.

  • Section 1115 Research and Demonstration Waivers - states use this to expand Medicaid coverage; may have a waiting list

Since different states have different eligibility requirements and different coverages, it is necessary to understand your own state’s offerings.

Veterans Affairs

Veterans and their surviving spouses can get benefits from the U.S. Department of Veterans Affairs that may pay for in-home care. Eligibility requirements include, but is not limited to the following:

  • Be a veteran or spouse of a veteran

  • Have a non-service related disability

  • Be enrolled in VA health care

  • Is unable to perform at least two activities of daily living

  • Have served ninety consecutive days active duty, with at least one day during wartime

  • Hold an Honorable Discharge status

  • Live in an area where the program is available

Personal funds, family members chipping in, long-term care insurance, Medicaid, and Veterans Affairs are just some of the ways that individuals can pay for their in-home care. If you have the benefit of time, it would be wise to consider these options and plan ahead for yourself or your loved one.


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